Taxable sales in Nevada and Clark County fell by double digits in October when compared with sales in the same month a year earlier. Merchants in the Silver State sold $3.1 billion in goods in October, down 17.8 percent from $3.7 billion a year earlier.
Clark County posted a steeper decline, with October’s $2.2 billion in sales down 19 percent from $2.8 billion a year ago.
Ho hum, right?
Thanks to a sustained slump in the nation’s and Nevada’s economies, taxable sales have fallen by double-digit percentage points year over year since November 2008.
Economists blame high unemployment and disappearing home equity for the year-long decline in spending. The two trends leave people with little money for travel, dining out and other discretionary activities that traditionally powered Nevada’s economy.
The data “continue to illustrate the effects of high unemployment rates, cautious consumer spending and an overall decline in business activity,” Gov. Jim Gibbons said in a statement. Gibbons added that encouraging more tourism, promoting business growth and economic diversification and bolstering consumer confidence would “better prepare Nevada for the future.”
In the near term, though, the sales numbers mean state officials must wrestle with a growing budget crunch. Nevada took in $241 million from sales and use taxes when compared with October 2008. That’s a 12.2 percent drop from a year ago. And in the first four months of fiscal 2010, which began July 1, the general fund portion of sales and use taxes was $18 million, or 2.3 percent, below projections that state legislators used to draw up their budget. The revenue helps finance prisons and schools, among other public services.
Economists caution against taking one month of data as a trend, but October’s figures reveal some subtle differences in the sales woes Nevada businesses have experienced.
Clothing retailers saw their first sales gain in many months, as sales rose 4.2 percent year over year. Sales declines among car dealers also moderated in October, falling 14.1 percent. That’s considerably lower than the 25 percent to 35 percent declines the sector had seen in the past year. But restaurants and bars stumbled more than average, with sales decreasing 8.9 percent after several months of flat to positive performances.
Construction sales and furniture sales stayed mired in big drops. Activity in the building sector plummeted 39 percent, while furniture retailers saw sales dip 19.3 percent.
Some corners of the economy improved sales year over year. Company-management sales jumped 220.2 percent and telecommunications transactions rose 29.3 percent. Heavy and civil engineering construction, which mostly entails public-works projects, gained 15.1 percent. Computer and electronics manufacturing activity increased 52.4 percent.
Fifteen of Nevada’s 17 counties recorded lower taxables sales year over year in October. Only mining-oriented Humboldt and Storey counties dodged sales drops.
Economists say there could be an end in sight, though it probably won’t come from large boosts in economic activity.
In coming months, as analysts compare new numbers to 2009’s slumping data, they’ll be weighing fresh figures against the worst declines on record, which means taxable sales going forward should decline less, or even flatten out, when measured year over year in 2010.
Contact reporter Jennifer Robison at email@example.com or 702-380-4512.